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The US expressed displeasure at Israel’s preliminary approval on Wednesday of a plan to build 600 new homes in a settlement deep inside the West Bank.

Speaking to reporters, State Department spokesman Mark Toner declined to comment about the announcement, but said the U.S. policy on settlement activity is clear.

“We don’t believe it’s in any way constructive to getting both sides back to the negotiating table. And we want to see clearly a comprehensive settlement that delineates borders and resolves many of these issues,” he said.

Israeli officials tried to play down Wednesday’s decision, which would put hundreds of housing units in the settlement of Shvut Rachel, saying construction was years away at best.

But the timing of the move may further hinder already troubled Mideast peace efforts. It casts a shadow over a trip by Prime Minister Benjamin Netanyahu to Washington in March, in which he is expected to discuss Iran’s nuclear program and other regional issues.

The UN’s Mideast envoy, Robert Serry, called the Israeli announcement “deplorable” and said it “moves us further away from the goal of a two-state solution.”

Israeli-Palestinian peace talks have been stalled for the past three years over the issue of Jewish settlements.

The Palestinians, who claim the West Bank and east Jerusalem for a future state, say there is no point negotiating while Israel continues to expand its settlements. Israel, which captured the areas in the 1967 Mideast war, says negotiations should begin without preconditions. The international community opposes all settlements.

A low-level dialogue launched last month in Jordan failed to make any breakthroughs. On Tuesday, Jordan blamed Israel for the impasse, citing Israel’s “unilateral policies.”

Israeli defense officials played down Wednesday’s decision, saying it was made by a low-level planning committee under the control of the Defense Ministry.

One official said the project was in the “embryonic” phase and would require “multiple stages of authorizations,” including approval by top leaders, that would take years to complete.

The officials spoke on condition of anonymity under ministry guidelines.

But Yariv Oppenheimer, director of Peace Now, a dovish group that opposes settlement construction, called it the biggest settlement construction plan in the West Bank since Netanyahu took office three years ago.

Construction is to take place in Shvut Rachel, a settlement nestled in the heart of the West Bank near Shiloh. Peace Now claimed that Wednesday’s approval also included retroactive legalization of about 100 homes built without permits. Defense officials could not confirm the claim.

“The government is giving a prize to building offenders and continuing the system by which every time the settlers build without permits, the government approves the construction and allows them even more construction,” Peace Now said.

Palestinian spokesman Ghassan Khatib said Wednesday’s approval “shows how Israel has no respect for the international community or international laws, while at the same time sheds a light on the … lack of effective actions by international community toward Israeli settlement policy.”